Reference no: EM133672975
Read the Netflix Case 13 pages C-149 to C-157 Based on the text material and the case material, answer the following questions:
1. Who are Netflix's competitors and why would they be likely to take action against Netflix? Include the role of market commonality and resource similarities.
2. Why does Netflix appear to have a competitive advantage for now?
3. How do you think Netflix could or should respond to competitor action? Include online competitors, use of technology, and geographic expansion.
Case
Streaming the Future: Netflix's Global Expansion Out of the 7.7 billion people on the planet, only 371 million arenative [English] speakers. And yet, historically, the majorityof entertainment content in the world has been produced inHollywood in the English language. It's in that disconnect thatwe see a tremendous opportunity.1-Greg Peters, Netflix Chief Product Officer (2019)Streaming the FutureOn the morning of November 10, 2020, Anna Mallett sat ather desk at Independent Television News (ITN) in Londonand gazed out the window. 2 She knew the day would be fullof commotion; in the early morning hours, the announce-ment of her imminent departure as ITN's CEO had beenmade public in a press release from Netflix. Mallett wasassuming the expansive role of Netflix's vice president (VP)of Physical Production, in which she would oversee all pro-duction in the United Kingdom and all local-language pro-duction across Europe, the Middle East, and Africa (EMEA);Mexico, Central America, and South America (LATAM); andEast Asia, South Asia, Southeast Asia, and Oceania (APAC).While she would miss her CEO role as well as the team shehad built at ITN over the past year and a half since joiningin April 2019, Mallett was ecstatic about the opportunity tojoin Netflix and lead the company's local production effortsthroughout most of the globe.Nevertheless it was a huge responsibility, and as a prac-tical matter, it would dramatically change Mallett's rhythmsof work, operations, and leadership. She recognized that therole would require all the expertise she had gained over thepreceding decades. While ITN was one of the largest inde-pendent television production companies in the UnitedKingdom-focused largely on the news programming ofBritain's ITV, Channel 4, and Channel 5-Mallett knew shewould also need to draw on her previous experience at theBritish Broadcasting Corporation (BBC), where she had ledBBC Studioworks and directed the BBC's overall commer-cial strategy,3 overseeing high-profile shows like Strictly ComeDancing and the venerated serial science fiction drama DoctorWho.4 She would likely find valuable the seven years she hadspent at the Boston Consulting Group in London, where shehad focused on media and retail, and even her MBA fromHarvard Business School and her DPhil from Oxford. Inmany ways, Mallett saw all her training and experience ashaving prepared her for this moment. And it was a momentshe was eager to seize. As she stated, "I am thrilled to bejoining Netflix at this exciting time as the company con-tinues to accelerate its production of great stories from allover the world. Netflix is a creative powerhouse, and I amlooking forward to working with my exceptional new col-leagues across the UK, EMEA, LATAM and APAC to bringthe very best films and series to audiences everywhere." 5 Shewould be reporting to Ty Warren, Netflix's VP of WorldwideProduction, who had suggested that Mallett's hire came at acrucial time for Netflix; she would bring "a wealth of globalproduction experience and strategic expertise to our produc-tion team as we continue to expand our investment in origi-nal programming throughout the world."6After 2020 Q2 earnings posted another quarter of mas-sive growth in paid subscribers, Q3 earnings showed a sub-stantial slowdown in new subscriptions, totaling 28.2 millionfor the first three quarters of 2020. The 26 million addedsubscribers through the first half of 2020 represented a morethan 100% increase over 2019, but the drop in new additionsto 2.2 million in Q3 fell short of expectations and caused con-cern.7 Nevertheless, Netflix's impressive growth outside of theUnited States and Canada in recent years-more than halfof paid subscribers now lived in the European Union, LatinAmerica, or Asia-put the company in a good position tocontinue to capitalize on the massive uptick in digital con-sumption resulting from COVID-19. Despite the pandemicpausing production on various studio projects, both in theUnited States and abroad, Netflix had been able to keep itsglobal member base satisfied with a steady stream of newcontent acquisitions and original releases.Yet, as the company acknowledged, 8 the favorable bumpin performance during the first half of 2020 was best treated asan aberration, and Netflix should not allow short-term gainsto distract from the reality that the pandemic-stricken futurewas rife with uncertainty; the downtick in new subscribersin Q3 illustrated some of that unpredictability. Competitionwas more intense than ever before, with nearly every majorentertainment company now pushing its own streaming ser-vice and many boasting back catalogs of content going backseveral decades. How could Netflix continue its impressivegrowth and stay true to its mission of providing entertainingand valuable content to more and more customers all aroundthe world? What would be the role of local content pro-duction across the globe in Netflix's continued growth and